By Akash Sriram, Abhirup Roy
(Reuters) -Tesla CEO Elon Musk said he expects vehicle sales to grow 20% to 30% next year, reassuring investors the company was improving its core business of selling electric vehicles profitably, and reducing concerns about when it could produce a robotaxi.
The forecast, building on a target for “slight growth” in deliveries this year, pushed the company’s shares up 12% in post-market trading on Wednesday. This set up Tesla to add about $80 billion in stock market value.
A drop in the cost of making vehicles added comfort for investors who saw Musk focusing on boosting Tesla’s industry-leading margin, even as he talked about a future dominated by autonomous cars.
Tesla’s long-awaited unveiling of its robotaxi on Oct. 10 failed to impress investors.
“No EV company is even profitable,” Musk told analysts on a conference call on Wednesday. “And to the best of my knowledge, there was no EV division of any company, of any existing auto company that is profitable. So it is notable that Tesla is profitable despite a very challenging automotive environment.”
Shares of Tesla’s smaller EV rivals Rivian and Lucid both rose 2% after-hours.
Musk said Tesla would roll out driverless vehicles offering paid rides next year, after the company received regulatory approval in California and Texas.
He said adoption – and sales – of the company’s supervised autopilot software, known as Full Self-Driving, increased substantially after the robotaxi event. Tesla this month again offered FSD free for a month to its current customers, for the second time this year.
The company said in a statement earlier it remained focused on expanding its vehicle lineup, cutting costs and making critical investments in AI projects and production capacity, despite uncertain demand and rivals pulling back on EV investments.
“Preparations remain underway for our offering of new vehicles – including more affordable models – which we will begin launching in the first half of 2025,” it said.
‘SWEET SPOT’
Tesla’s third-quarter profit margin from vehicle sales, excluding regulatory credits, grew to 17.05% from 14.6% in the prior three-month period, according to Reuters calculations. Wall Street had expected 14.9%, according to 24 analysts polled by Visible Alpha.
But Tesla’s finance boss, Vaibhav Taneja, said it would be “challenging” to sustain these margins in the fourth quarter ending December.
The EV giant said that the labor and material costs of making vehicles, known as the cost of goods sold per vehicle, dropped to its lowest-ever level, about $35,100. Adjusted profit of 72 cents per share in the third quarter beat an average estimate of 58 cents.
